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Cross-border shopping: Costs associated to travelling across the line

There are costs associated with crossing the border and shopping in the U.S.

— image credit: John Morrow photo

posted Feb 27, 2013 at 10:00 AM— updated Feb 28, 2013 at 10:08 AM

Remember a time when it was easy to cross the border into the U.S.?

That was before 9-11. Security concerns on both sides of the border now mean all documents must be in order and up-to-date, all of which comes with a price.

But there are other costs to travelling across the line, according to Mel Jesson, co-owner of the South Surrey-based Black Bond Books chain, who frequently crosses the border on business.

While low prices in the U.S. may tempt Canadian consumers, it's easy to underestimate the amount of gas you're burning driving south of the border, or, worse still, sitting in a lineup waiting to cross into the U.S. or get back into Canada, he said.

"I don't think a lot of people do the math on this," Jesson said.

"If you go down to the U.S. with an empty tank and fill up down there, you may be doing alright, but it doesn't always work out like that."

Buying a meal during the trip is another way to cancel out the savings on consumer goods. And, cross-border shoppers are paying an 8.5 per cent tax on U.S purchases, Jesson said, and could be liable to pay the current HST on top of that when they return – quite apart from duties which could be charged on the goods.

"You're now paying a total of 20 per cent on your purchase," he said. "There are ways around it, if you want to apply for a refund, but who does it?"

Jesson said B.C.'s imminent return to GST and PST (on April 1) poses many questions that have not yet been answered, but if the provincial sales tax works the way it used to, consumers who cross-border shop will be liable to pay provincial sales tax on their U.S. purchases.

"If you go across the line and buy a pair of jeans you're supposed to send seven per cent tax to the provincial government," he said. "That's the way it was and while there haven't been details about the return to PST, I can't think they'd change that."

Another cost factor for travelling to the U.S. is the need to purchase additional medical insurance from a private insurer. An accident, or other medical emergency, could arise during even the briefest cross-border trip.

According to B.C. Ministry of Health figures, while B.C. pays $75 per day for emergency in-patient hospital care, the average cost in the U.S. often exceeds $1,000 a day – and can run as high as $10,000 a day in intensive care.

"Anybody who goes across the border without coverage is not thinking," said Jesson.

"Once you're in their system, it's going to cost you. Just to go down to Mt. Baker to go skiing has wound up being a tragedy for a lot of people."

Having a Nexus identification card – which allows low-risk pre-approved travellers to use designated Nexus border crossings without being regularly questioned by customs and immigration officers – has been touted as one key to beating lengthy, and costly, border-crossing waits.

But there can be hidden hassles and costs in connection with obtaining a Nexus card – which is far from an automatic privilege.

Cost for a card that is valid for five years is $50 – but according to Service Canada there may be a six- to eight-week wait for eligibility.

An applicant will have to supply photocopies of original identification documents, such as a passport and birth certificate.

But there are other factors that may create obstacles to receiving a card.

Canadian applicants must meet the admission requirements of both the U.S. and Canada, must have resided in Canada for at least three consecutive years and be ready to undergo background security checks using Canadian and U.S. law enforcement databanks.

You must have no criminal record or must have been granted a pardon, or 'record suspension' as it is now known. Past violations of customs or immigration legislation will also result in the application being red-flagged.

Applicants who pass the initial security check must then be interviewed at a joint Canada-U.S. Nexus enrolment centre, at which a photograph, fingerprints and an iris scan are taken.

U.S. Customs and Border Protection says its goal is to process Nexus-lane travellers within 15 minutes. Like all goals, it's sometimes missed.

"I have a Nexus card and there are times that I've been at the border and seen the Nexus lineup is 30-40 cars, with a half-hour wait," Jesson said.

"I've skipped over to the regular lane because it was actually travelling faster."

Newest development in cross-border travel is the Enhanced Drivers Licence (EDL) which ICBC is promoting as a one-piece proof of identity and citizenship which obviates the need for carrying a passport.

The cost of obtaining an enhanced EDL includes both a basic fee and an extra fee for the enhanced version.

According to ICBC, a two-year original licence or renewal will cost a total of $66, while a five-year original licence or renewal will set you back $110.

To upgrade your licence to an EDL outside of the normal renewal period costs $52, the same price as an EDL for a senior driver seeking either a two-year original licence or a five-year renewal.

Non-drivers seeking an Enhanced Identity Card (EID) can expect to pay $70 for a five-year original card, and $50 for a five-year renewal.

Replacement for a lost or stolen EDL is $27, and $25 for an EID.

But even with a Nexus card, and an EDL or EID, Canada Border Services Agency still recommends carrying a valid passport as the best guarantee of avoiding hassles in making any cross-border trip.

And, according to Service Canada, the price of new and renewal passports will be significantly higher under new fees that come into effect on July 1, when Canada officially adopts electronic passports, known as ePassports, containing readable electronic chips.

At present, cost of a new or renewal passport, valid for five years, is $87 for a 24-page document and $92 for a 48-page document. Passports for children aged three to 15 years cost $37 or $39 for the larger passport, while documents for children younger than three years old are $22, or $24 for the larger version.

As of July 1, Canadians can apply for an adult passport valid for 10 years for $160. For a five-year passport the cost will be $120, while a children's passport will rise to $57.

Can't find your passport? The cost of a replacement, currently free, will be $45 as of July.

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